bargaining negotiations – Workplace Law & Strategyhttps://www.workplacelawandstrategy.com.au
Insights. Advice. New Thinking.Thu, 22 Aug 2019 05:53:31 +0000en-US
hourly
1 https://wordpress.org/?v=5.3.3&lxb_maple_bar_source=lxb_maple_bar_sourcehttps://workplacelawandstrategy.lexblogplatform.com/wp-content/uploads/sites/225/2019/10/cropped-favicon-32x32.pngbargaining negotiations – Workplace Law & Strategyhttps://www.workplacelawandstrategy.com.au
3232Finger pointing on agreement approvals but…https://www.workplacelawandstrategy.com.au/2019/08/finger-pointing-on-agreement-approvals-but/
Thu, 22 Aug 2019 01:51:38 +0000https://www.workplacelawandstrategy.com.au/?p=3460Continue Reading…]]>Lots has been said recently in the press about enterprise agreement making and the approval process by the Fair Work Commission (FWC). In short, the numbers of agreements being made is down and approval times are “long”. The graph below, recently cited in an AFR article, demonstrates a possible link between approval times slowing and a Full Bench decision involving Coles. But the numbers are turning.

It’s not the only decision at play and it’s far from the whole story.

A steady stream of Federal Court decisions has effectively set the level of scrutiny that the FWC must apply – scrutiny which puts high demands on the FWC and in-turn those seeking approvals. Delays are inevitable, particularly given the FWC works with the parties on curing approval defects where possible. In effect, the FWC often does the work of the parties to ensure the approval requirements are met. Bear in mind that there are between 3,000-5,000 agreements to approve each year. Each approval requires over 30 requirements to be met, necessitating more than simply a “tick box” to deliver on the legislative charter. To suggest that this is a simple “rubber-stamping” process is wrong. There are 43 Fair Work Commission members who are charged with this.

We recently prophesied that the numbers would turn. Recent statistics from the FWC bear this out. A legislative change late last year enabling the FWC to approve agreements in a way that overlooks “minor procedural or technical errors” is enabling faster approval times. The corollary of this is that the FWC must still identify but, can overlook, errors made by parties who file agreements that do not meet the legal requirements.

In time this will probably see many an employer becoming even more blasé about the agreement-making requirements, because the FWC can more readily come to the rescue. But with all the criticism levelled at the FWC at approval delays, its patience and willingness to work with the parties to ensure approval might be tested. In other words, will we see non-compliant agreements more readily rejected, rather than time taken to clarify certain facts or fixing application errors?

]]>Key success factors in enterprise bargaininghttps://www.workplacelawandstrategy.com.au/2016/02/key-success-factors-in-enterprise-bargaining/
Tue, 23 Feb 2016 23:00:08 +0000http://www.workplacelawandstrategy.com.au/?p=1908Continue Reading…]]>We’ve been doing work in a range of sectors facing challenging enterprise bargaining negotiations. Legacy arrangements made in the past are no longer fit for the future.

What are the some of the key success factors for employers who achieve gain from a difficult enterprise bargaining negotiation?

As with any significant project, leadership is critical.

A ‘burning platform’ galvanises clarity of need. What is the gain needed and what ‘pain’ is tolerable in its pursuit?

A well run campaign demands solid resourcing and alignment across the business in what invariably becomes a multi-dimensional project. Often, it gets tough and resolve is critical but this is where planning is invaluable.

In our unique enterprise bargaining workshops we take clients through a process which addresses each of these issues to form a bedrock for success.

Expect to see the bargaining framework as a central feature of submissions, particularly by employer bodies, and a focus of the Commission’s review.

With a final report due in November this year, the inquiry will occur amidst one of the bigger years in the enterprise bargaining cycle.

As Mathew Dunckley notes in his 9 January AFR article “Call to keep lid on wage claims” many high-profile and large employers are due for bargaining in 2015. Add to this list employers in the stevedoring and airline industries together with the on-going offshore vessel operator negotiations.

When it comes to bargaining, the key issue is whether the power balance in bargaining between employers and unions is right and, if not, how to calibrate it.

In turn, three key issues arise:

the subject matter of negotiations and whether it should extend beyond the employer and employee relationship (as is the case now);

the ‘levers and pulleys’ for the taking and ending of protected industrial action; and

the capacity of employers to bargain directly with employees.

These issues will be profiled through bargaining campaigns this year. To the third point, expect to see more employers putting deals directly to employees for their approval.

In a ‘big bargaining year’, the Commission will have a backdrop of great case study material with currency.

]]>7 lessons for successful bargaininghttps://www.workplacelawandstrategy.com.au/2014/07/7-lessons-for-successful-bargaining/
Wed, 30 Jul 2014 07:04:46 +0000http://www.workplacelawandstrategy.com.au/?p=1350Continue Reading…]]>Several years ago, the authors of this blog toured the United States to glean what Australian employers could learn from the US enterprise bargaining experience. This led to the widely reported “7 lessons from the US for successful bargaining”.

The observations made then remain pertinent today. Those lessons are:

The groundwork for a successful bargaining campaign began three years ago;

Enterprise bargaining time is not engagement time;

Successful bargaining campaigns are business-wide and top-led;

Employers ought lead the communication agenda: “tit for tat” communications are rarely effective;

Successful bargainers seek to control the bargaining agenda;

Plan in advance for BATNA [Best Alternative To a Negotiated Agreement] and fallout; and

Should any of our readers require any further details on the above, we would be happy to provide this to you.

We are also in the process of developing our “7 keys to negotiating collective agreements in Australia”. The focus of this topic lies in the conducting of the negotiation itself. Whilst there is much commentary in the Australia context on the legal environment as it impacts collective bargaining, there is precious little by way of the application of negotiating fundamentals to what many businesses regard as the most challenging of negotiations.

]]>The enterprise bargaining zone & the ‘twilight zone’https://www.workplacelawandstrategy.com.au/2014/06/the-enterprise-bargaining-zone-the-twilight-zone/
Tue, 24 Jun 2014 01:01:02 +0000http://www.workplacelawandstrategy.com.au/?p=1286Continue Reading…]]>Understanding the true boundaries of the enterprise agreement zone (“EA zone”) and the “workplace zone” is crucial to the development of any workplace relations or enterprise bargaining strategy. This is illustrated in the diagram below.

The EA zone represents the terms and conditions which are contained in an enterprise agreement. For many employers, this zone is one which restricts the business. It provides a “handbrake” on the capacity to implement change and improve productivity. Not surprisingly, unions often take the opportunity in enterprise bargaining to introduce clauses which restrict the capacity of the employer to do certain things and thereby limit managerial prerogative.

Some employers assume that the agreement’s silence on an issue means that the right does not exist. Silence on a particular issue (such as drug and alcohol testing) should not be presumed as preventative. If it’s not in the agreement, the right may exist in the workplace zone (assuming its lawful and reasonable).

The workplace zone represents the terms and conditions of employment which sit outside of any enterprise agreement. These include the express and implied terms of employment being the zone which enables an employer to lawfully and reasonably direct employees to perform work as required. This zone is relatively unencumbered. For some employers, it’s a “twilight zone” of rights and obligations. Company policy, which dictates matters relating directly to the work and ancillary to it, resides in this zone (although not exclusively if incorporated into an enterprise agreement). The written contract of employment often expressed as a “letter of offer” can be put to good use here.

Upon a proper analysis, employers are sometimes surprised to learn that the workplace zone is larger than they otherwise perceived. Employers often assume that “custom and practice” in this zone yields more restrictions than actually exist. A solid understanding of what the law regards as “custom and practice” results in more freedom than is otherwise thought.

Conversely, many businesses do not utilise the EA zone as much as they otherwise could. In other words, there is potential within the enterprise agreement to undertake certain things, but the business is reluctant to test its boundaries, particularly in the face of ambiguity about the application of the EA to a particular circumstance. The path of least resistance sees employers attempt to negotiate the right into the EA come the next bargaining round.

Negotiating into an enterprise agreement rights which already exist is often a flawed approach. First, it is very difficult to negotiate such rights in. Secondly, it assumes that the rights do not already exist, thereby impacting the interpretation of the agreement in the future. Thirdly, once in an EA, the typical disputes procedure renders the right/obligation amenable to greater disputation.

The bottom line for employers is:

be clear of the boundaries of the respective zones and avoid introducing into your enterprise agreement rights which already exist;

sometimes, clarity on the boundaries requires the EA zone boundary to be tested; and

the “twilight zone” can potentially provide more opportunity than is first thought.

]]>The long and the short of enterprise bargaininghttps://www.workplacelawandstrategy.com.au/2014/02/the-long-and-the-short-of-enterprise-bargaining/
Tue, 11 Feb 2014 07:02:48 +0000http://www.workplacelawandstrategy.com.au/?p=1041Continue Reading…]]>Once again collective bargaining in Australia is a hot topic. Both the Prime Minister and Senator Abetz have bemoaned the making of ‘soft deals’ by employers.

Employers in response, feeling somewhat chided, might blame the Fair Work Act. What will they complain about? A system that makes it easy for unions to exert their muscle in bargaining through the taking of industrial action. The same system that makes it hard for employers to stop such action – indeed there are few avenues to do it. On the union side, if you take away the capacity to take such action, what leverage remains?

This is not a new issue and the employer lobby has been somewhat split on the solution. Some argue for a regulator such as the Fair Work Commission to step in and determine intractable and volatile bargaining outcomes more readily. Others regard such intervention as dangerous. The Government’s policy to improve the Fair Work laws aims to moderate the ease with which industrial action can be taken.

More fundamental change which might see, for instance, the return of an individual bargaining option, is somewhat dependent on the Productivity Commission review of the Fair Work Act. A galvanised employer body will need to make its case. The scene is set – but the actors need to play their parts.

The same is true for the award review process. This process sees the Fair Work Commission review the way awards are working. You will hear plenty from employers about: painful weekend penalty rates; more difficult trading conditions; the folly of a Sunday penalty being higher than a Saturday penalty (when working on a Sunday no longer commands the premium on our time as it did when the church and family roast prevailed). All of which might be true.

But you have to prove it in a contested hearing before the Fair Work Commission. Ironically it’s the employers that find it hard to properly resource such hearings in order to make a case. Alignment amongst employers and funding is a real challenge. This is not so much a criticism, as an observation of reality.

But back to bargaining. There are no doubt circumstances when employers are placed in an invidious position. Major project construction, which sees enormous capital investment at risk is an example. Faced with such risk, major contractors and their clients endorse deals aimed at getting the job going. It’s no accident then that we learn of pay outcomes well outside otherwise rational norms – over $300,000 and sometimes $400,000 for offshore construction workers. The price of saying “no” is too high having regard to the cost of having capital lay idle over the life of a particular project. But in the long run, and from a macro perspective, the price of saying “yes” becomes unstainable. The price of labour for the last major project becomes the minimum benchmark for the next, irrespective of any other factors which might otherwise reasonably dictate the price. But that’s the major project dynamic.

There are other cases where the short term cost of industrial action (and in the vast majority of cases it is short term) is overestimated, whilst the long term compounding cost of doing the deal is underestimated. Fear of industrial action outweighs the reality.

Sometimes there is a skill imbalance. Line managers whose day job it is to run a production plant, warehouse, or blue collar services business are often pitted in a negotiation against union officials whose day job it is to negotiate enterprise agreements. This is despite the fact that for many businesses, the labour cost outcome attributable to the enterprise agreement is a major, if not the major, line item in operating expenses. Plenty will tell you that such a negotiation is a far cry from the negotiation of a commercial contract. Like any meaningful business project, the enterprise bargaining negotiation demands preparation, resources, expertise and a well-founded strategy backed by the leadership of an organisation. Sometimes the employer has only begun to put in place effective communication systems with employees as enterprise bargaining kicks off. Too late. Sometimes workplace grievances are left simmering, leaving the enterprise bargaining process to open and exacerbate a wound. Ultimately there is a leadership issue here.

Sure there’s cause to review the regulatory environment – as the Government is promising to do. But there is also room for greater resourcing and more rigour at the negotiating table and outside it.

I’m reminded of a story told to me by an engineer who headed up a large regional Victorian manufacturing facility. Together with a direct report, he was tasked to negotiate an enterprise agreement with two unions. They were opposed to 6 union negotiators. The union representatives arrived disrespectfully and unapologetically late. The meeting opened. “They’ve given us 5 by 3 (a 5% increase for each of 3 years) down the road – so why don’t you do the same?” the managers were immediately asked. Unprepared and under-resourced, they responded with “Ah… we’re not really sure. We’ll have to get back to you on that”. In the words of the engineer “things went downhill for us from there”. That manufacturing facility is no longer with us.

Amidst the many reports about how employers need to be prepared for the new laws, the message could equally apply to union behaviour in workplaces – and not just their own.

On their face the new laws may apply to union officials or office holders who engage in bullying behaviour towards workers, such as managers, in the context of enterprise bargaining negotiations or industrial disputes, or when exercising rights of entry.

Take the following example, which will resonate with some employers. A union official takes aim at a manager or an executive. The official sends repeated inappropriate emails or posts flyers or other union correspondence containing derogatory content about management’s approach on a noticeboard or in some other prominent area. Whilst such behaviour has in some circumstances been seen as part of the “cut and thrust” of industrial relations, it can be very distressing for workers who are subject to it.

Such behaviour may, depending on the particular circumstances, give rise to a bullying situation.

The Coalition approach was that union officials would be subject to the bullying laws

The Coalition Industrial Relations policy released in May 2013 provided that the Coalition would support Labor’s then proposed changes to address workplace bullying on condition that, amongst other things, “the changes are expanded to include the conduct of union officials towards workers and employers”. The Labor Government’s proposed amendments ultimately passed through both Houses of Parliament with the support of cross bench Members of Parliament. The (then) Opposition’s proposed changes were not incorporated into the legislation.

But the new bullying laws may apply to union officials anyway.

The bullying field of protection

The provisions establish a “field of protection” around workers (including employees such as managers) where the worker carries out work “in any capacity” for a person conducting a business or undertaking. For the provisions to apply, the bullying must take place whilst the worker is “at work” in a constitutionally covered business or other specified undertakings. Parliament noted in the Explanatory Memorandum to the Bill that “orders will not necessarily be limited or apply only to the employer of the worker who is bullied, but could apply to others, such as co-workers and visitors to the workplace”.

Given the breadth of these provisions, it is conceivable that repeated unreasonable behaviour by union officials or other visitors to a workplace will be caught by the bullying laws.

The new laws will potentially apply to union officials who behave unreasonably towards workers during enterprise bargaining negotiations or industrial disputes, or when exercising rights of entry. The new laws may also have application to the conduct of union officials towards sub-contractors on building sites, or indeed conduct by a sub-contractor towards a worker.

Whether the Commission will make bullying orders in these circumstances will depend on a range of legal and practical issues including how the bullying laws will be seen to interact with other provisions of the legislation (such as good faith bargaining, general protections and right of entry permit restriction provisions) which spell out their own consequences for contraventions of these parts of the legislation. It is unlikely that the immunity applicable in relation to protected industrial action would apply to bullying conduct.

Inevitably, a case against a union official relying on the anti-bullying laws will be run. Whether or not the FWC believes it has the power to make such orders, or that it should exercise any discretion to make orders in particular circumstances, remains to be seen.

One thing is clear: in time the full ambit of the bullying provisions will be tested, with significant changes for the operation of the modern workplace in store.